Conversion/Switch of Government of India Securities
Distilled Policy Brief
- The Government of India announced a conversion/switch auction of its securities for an aggregate face value amount of ₹20,000 crore, conducted through the Reserve Bank of India's e-Kuber platform.
- The auction follows a multiple-price based mechanism where successful bids are accepted at their respective quoted prices, with settlement occurring on a T+1 basis.
🎯 Prelims High-Yield Examination Points
Government of India security conversion/switch auctions are conducted via the RBI's e-Kuber platform using a multiple-price based auction mechanism on a T+1 settlement basis, with a minimum bid size of ₹10,000.
⚖️ Mains Analytical & Syllabus Linkages
Analyze how debt management operations like security switches and conversions help the government manage its redemption profile, mitigate refinancing risks, and improve liquidity in the secondary market.
🎯 UPSC Prelims Practice Drill
Consider the following statements regarding the conversion/switch auction of Government of India Securities: 1. The auction is conducted through the Reserve Bank of India's Core Banking Solution (e-Kuber) platform. 2. It follows a uniform-price based auction mechanism where all successful bids are settled at a single cut-off price. 3. A switch transaction implies that market participants simultaneously agree to sell a source security and buy a destination security. Which of the statements given above is/are correct?
- [A] 1 only
- [B] 1 and 3 only
- [C] 2 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
Statement 1 is correct because the conversion/switch auction of government securities is conducted through the Reserve Bank of India's e-Kuber platform. Statement 2 is incorrect because the auction follows a multiple-price based mechanism (where successful bids are accepted at their respective quoted prices), not a uniform-price mechanism. Statement 3 is correct as bidding in the switch auction implies market participants simultaneously agree to sell the source security to the Government of India and buy the destination security at their respective quoted prices.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.